Creating an Economic Model to Analyze and Evaluate the Relationship between Environmental Policy and the Economy

Abstract

We surveyed the economic models used to analyze and evaluate the impact that global environmental policy aimed at reducing the volume of carbon emissions arising from economic activity has on the economy. Typical examples of such economic models are the models that are referenced in the IPCC’s series of Assessment Reports. Rather than single-country economic models, these are world economic models, and while they share a common foundation as economic models, they also differ in some aspects and the analytical results lack uniformity, exposing their diversity. Economic models are representations, in the form of numerical models, of the correlation between the global environment and economy, but these models vary depending on differences in thinking, and, accordingly, the analytical results also vary. However, what is important is whether the discrepancies in the calculation results can be reproduced after the fact by a third party, and that causes of this diversity can be verified and are not hidden in a black box.